New University Hospital poor fund reduces government contribution to $29.6 million

City-state funding falls for University Hospital

Nov. 8, 2012

Written by

The Courier-Journal

A new, one-year agreement has been forged for the trust that disburses government money to care for the poor at University Hospital — and it calls for lower-than-usual government funding at $29.6 million.

The board directing the Quality and Charity Care Trust discussed the revised agreement during a meeting Wednesday, and also talked about proposed changes to its bylaws and articles of incorporation to reflect a May state audit report that found the trust lacked adequate oversight.

The new agreement — involving the city, state, University of Louisville and University Medical Center, which runs the hospital — says $7 million would come from Louisville Metro and $22.6 million from the state. That compares with government funding of about $34 million in the year ending June 30, which included a higher state contribution and a rebate returned to the city.

“We appreciate the amount of funding from Louisville Metro and the Commonwealth of Kentucky,” particularly during this struggling economy, said Dr. David Dunn, chairman of the QCCT board and U of L executive vice president for health affairs.

The new funding reflects two recent changes. The Louisville Metro Council this year approved a budget that included $7 million for the poor fund, adding a budget clause that says more money should be put into that trust if revenues exceed projections.

The city for decades contributed about $9.8 million a year toward indigent care, but since the 1980s the hospital has rebated $2.8 million back to the city.

And the state General Assembly, during its last session, passed a bill saying the state’s contribution will be reduced by an amount equal to any rebate or city funding reduction — meaning city funding at $7 million reduces the state’s contribution by $2.8 million.

Chris Poynter, spokesman for Mayor Greg Fischer, called the new trust document “an agreement we can live with.”

“We’ve taken out the rebate language, but the funding has stayed what it has been for years,” Poynter said.

Officials said the QCCT funding doesn’t cover all indigent care; the hospital faces annual indigent care cost of $80 million to $84 million, including about $60 million for Jefferson County residents, they said.

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In addition to a new government funding total, the new agreement includes a more specific definition of indigency and medically needy.

For example, it says a person is not medically needy if he’s determined to have concealed any assets, has another source of care available but doesn’t use it, or is eligible for insurance or public assistance but refuses to apply for it.

“We wanted to tighten up that language,” Poynter said.

Officials said the agreement was made for one year partly because of the uncertainties of the federal healthcare reform law and how it might affect University Hospital.

The QCCT board also discussed potential changes to its governing documents, but delayed taken action because board members didn’t have copies of all the documents outlining the changes. Dunn said they would call another meeting soon.

Glenn Bossmeyer, associate university counsel, said new proposed bylaws say U of L’s Board of Trustees would appoint three members of the QCCT board of directors, the governor would appoint three, the Louisville mayor would appoint two and the Louisville Metro Board of Health would appoint one.

The chairman of the QCCT board could not be one of the members appointed by U of L — meaning Dunn, who was re-elected as chairman at Wednesday’s meeting, would have to step down as chairman.

These changes would balance power more evenly on the board.

Bossmeyer and Dunn said the changes — and the new agreement — address state Auditor Adam Edelen’s concerns. Edelen’s audit said U of L has had “significant influence” over the board, controlling board appointments and administrative functions — a structure not geared for proper, independent oversight.

It also found the board failed to meet for about three years, wasn’t suited for proper oversight and lacked written policies and procedures.

The audit found no evidence that state and city taxpayer money was abused in the QCCT.

An audit by BKD CPAs & Advisors, approved Wednesday, showed no problems with the financial statements. According to the audit, the total annual funding from government sources amounted to $33.9 million for the year ending June 30, and disbursements to University Medical Center were the same.

“There were no issues at all found,” said Mike Curtin, QCCT board treasurer and U of L’s vice president for finance. “It was an excellent audit.”

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Courier-Journal reporter Darla Carter manages "In The Prime," a collection of news, features, videos, data and blog posts designed to help you thrive as you age. A longtime writer of the Thursday Health & Fitness section, Darla will find and post stories, blogs and news items every day on health, fitness and nutrition – all intended to help keep you and your family healthier. She is a Louisville native and graduate of Western Kentucky University.• Contact Darla with story ideas or feedback